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Heterodox Economics 2

Alternative Analysis to the Mainstream "Blackboard Economics</I> Based on the Concept of "Creative Mental Labor</I>

Hasan Gürak

Heterodox Economics 2 consists of articles which are complementary to the subjects presented in the book titled Heterodox Economics, published in 2012. The aim is to present alternative economic approaches based on the concept of Creative Mental Labor that are intended to make a contribution to the emergence of a new economics. The analysis throughout the book is based upon the principle that the original source of all the value added to products (considering nature as a given), is the mental and physical inputs of labor that continuously create new technologies while at the same time making use of the available technologies.

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2- On Value And Price

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An alternative approach to value & price theory “Where is the discussion of mental labor and tech- nological change in the theory of value and price?” H. Gürak Introduction Only lip service was paid to the "growth theory" until the 1950's. Since the 1950s, however, concepts like technological change and mental labor (human capital) have been re-discovered as a vital, essential and indispensable ingredi- ent of the growth theory. Nowadays there is wide a range of endogenous growth theories constructed on the back of these re-discovered concepts. In spite of many shortcomings the trend is promising and may enable modern economists to construct more realistic and reliable growth models capable of accounting for actual global economic facts and developments. Meanwhile, however, the backbone or the basis of all these theories, i.e., the value and price theory still fails to keep pace with developments in growth theo- ry. It neglects to incorporate key concepts such as technological change and mental labor in its analysis. As a result, the “modern” but sterile price theory is bound to fail to properly account for the price formation in the "real" markets. Nor does it provide any appropriate or sound premises for the construction of any related economic theories that are affected or influenced by the price signals coming from the real markets. The Hypothesis The hypothesis of this paper is to show that all value-created or added to the natural resources originates from the labor-power that offers two kinds of ser- vices; mental labor...

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